The dream of owning your own home is something many people aspire to, but the high costs involved, particularly when it comes to saving for a deposit can make it feel like an unattainable goal. Fortunately, the UK government’s Rent to Buy scheme offers a fresh perspective, providing a real opportunity for those who want to make the transition from renting to owning a home.
This guide takes you through the Rent to Buy scheme, how it works, and how it can help you take the next step towards owning your own home.
Related: Buying vs renting: what’s the difference
What is rent to buy?
Rent to Buy is a government-backed initiative designed to help you save for a deposit while living in a newly built home. The scheme allows you to rent at a reduced rate, typically about 20% lower than the local market rent. This discounted rent enables you to set aside money for a future deposit, making it easier to work towards owning the home you’re already living in. It’s an ideal option for those who may not have enough saved for a deposit but are ready to start taking steps toward owning their home.
The Rent to Buy scheme is available in England (excluding London) and is usually offered through housing associations or registered providers of social housing. Properties in London are included in a distinct programme known as London Living Rent.
Related: Understanding the costs of buying a home
How does rent to buy work?
The Rent to Buy scheme gives you the chance to rent a newly built property at a lower-than-usual rent. This discounted rent typically makes up about 80% of what you would pay for a similar property in the area, which frees up additional funds that you can save for your deposit.
Typically, the tenancy lasts for up to two years, though it can often be extended if needed. During this period, you get to live in the home with no pressure to buy immediately. This gives you the time to build your savings and get financially prepared for homeownership. After the rental period, you have the option to purchase the property, provided you’ve saved enough for a deposit and can secure a mortgage.
In some cases, housing providers also offer a shared ownership option. This means you can buy a percentage of the property and continue renting the rest, gradually increasing your share until you eventually own the entire home.
Related: What is a shared equity mortgage? Is that right for you?
Who is eligible for rent to buy?
Rent to Buy is designed for people who want to buy a home but may be struggling to save for a deposit due to high rents or other financial constraints. To qualify for the scheme, you typically need to be a first-time buyer, although people returning to homeownership after a relationship breakdown may also be eligible.
Eligibility generally includes being in full-time or part-time employment, with an income that means you can afford the reduced rent but may not yet have the means to buy a home outright. Some housing providers may have additional criteria, such as a local connection to the area, so it’s always best to check the specific requirements with your provider.
Related: First time buyers: how to save for a deposit
How to apply for rent to buy
Applying for Rent to Buy is straightforward. First, you’ll need to find Rent to Buy properties in your area. These are typically listed through housing associations or other social housing providers. You can search online or contact local authorities to find out which properties are available.
Once you’ve found a property that interests you, check the eligibility criteria to ensure you qualify. This will usually involve submitting documents to prove your income, employment, and other relevant details. If you meet the criteria, you can submit your application for consideration.
If your application is successful, you’ll be offered a tenancy agreement. This agreement typically lasts for up to two years, during which time you can use the opportunity to save for a deposit. When the time is right, you can apply for a mortgage and purchase the property.
Related: Mortgage eligibility: What buyers need to know
The next step
Rent to Buy provides a practical solution for those looking to move from renting to owning a home. With reduced rent and the chance to save for a deposit while living in a property you could eventually own, this scheme offers flexibility and a clear pathway to homeownership.
If you’re ready to explore how Rent to Buy can work for you, contact your local Whitegates branch for tailored guidance today.
